Directors abandon APN Media

APN News & Media has been left rudderless by the resignation of chairman Peter Hunt, managing director Brett Chenoweth and four other directors this afternoon, after a clash with major shareholders Independent News & Media (INM) and Allan Gray.

The board and management had proposed a capital raising, which UBS analysts flagged could be $300 million at 20 cents a share, to reduce APN’s debts but the plan was resolutely opposed by INM, which owns 29 per cent of the company, and fund manager Allan Gray, whose Orbis arm owns another 20 per cent.

INM, which is 22 per cent owned by Irish billionaire Denis O’Brien, on Friday sought to requisition a general meeting to remove Messrs Hunt and Chenoweth, as well as independent directors Melinda Conrad, John Harvey, Kevin Luscombe and John Maasland. If successful, this would have left only deputy chairman Ted Harris, independent director Paul Connolly and INM’s Vincent Crowley on the board.

INM said it had lost confidence in Mr Chenoweth’s ability to implement the strategic initiatives necessary to reposition APN for the more challenged media landscape that has emerged in Australasia.

In its statement, APN said ‘‘the non-INM representative directors of APN unanimously support Mr Chenoweth and the strategy being implemented under his leadership’’.

But Allan Gray’s Simon Marais told the Australian Financial Review on Monday that he was ‘‘dead against’’ a rights issue and “if the board insists (it is) the only way ... we’d rather be rid of them’’.

APN shares closed last Thursday at 30c a share and have fallen steadily since May 2010 when they peaked at $2.50.

APN, which has a market capitalisation of $199 million, has net debts of $477 million, of which about $400 million matures in 2014-15.

A substantial raising would be impossible without the support of the two largest shareholders: UBS analyst Richard Eary, who assumed a $300 million raising at 20 cents a share, noted on Monday any accelerated non-renounceable rights offer above the current market cap would require shareholder approval via an extraordinary general meeting.